Friedman on India, II

A few months before “Uncle Milt” passed away, he granted an interview with the WSJ’s ever-excellent Tunku Varadarajan.. While the interview overall is pretty short, there are a couple good India nuggets –

India–how do you assess its prospects?

Friedman: Fifty years ago, as a consultant to the Indian minister of finance, I wrote a memo in which I said that India had a great potential but was stagnating because of collectivist economic policies. India has finally started to disband those collectivist policies and is reaping its reward. If they can continue dismantling the collectivist policies, their prospects are very bright.

Any thoughts on a China versus India comparison?

Friedman: Yes. Note the contrast. China has maintained political and human collectivism while gradually freeing the economic market. This has so far been very successful but is heading for a clash, since economic freedom and political collectivism are not compatible. India maintained political democracy while running a collectivist economy. It is now unwinding the latter, which will strengthen freedom of all kinds, so in that respect it is in a better position than China.

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p>Color me cautiously optimistic. While in the long run I tend to agree with Mr. Friedman that political freedom and economic freedom go hand in hand, in the short term, there’s no shortage of demagoguery that readily attacks both.

Previous SM coverage on Friedman and India here.

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20 thoughts on “Friedman on India, II

  1. I believe China is still in a better position, even in the medium to long term, simply because it’s collectivist social policies do not prevent it from building a very strong military. At the end of the day, despite any economic policies, any nation, whether it be the U.S., U.S.S.R., India, or China, exerts influence through the threat or use of military force. I hate to quote Tom Friedman, but I believe there’s a lot of truth to his saying that there would not be Wal-Marts and McDonalds’ in Beijing if the U.S. did not have a massive naval fleet in the Pacific. I guess my point is that I would add military strength as a third element to your criteria of a country’s prospects, in addition to political and economic freedom.

  2. At the end of the day, despite any economic policies, any nation, … exerts influence through the threat or use of military force.

    Japan, Switzerland, Taiwan, South Korea are all good examples where this isn’t true.

  3. Japan, Switzerland, Taiwan, South Korea are all good examples where this isn’t true.

    Good examples, but keep in mind that Japan, Taiwan, and South Korea all rely on being under the U.S. nuclear umbrella while Switzerland relied on NATO for military strength during the cold war. Technically, I guess your argument works because these nations don’t have huge military budgets. But their economic policies would not have been possible without U.S. military protection. China and India, on the other hand, are trying to develop as economic powers without relying on protection from a super power.

  4. I will concede that economic success, to some extent, relies on a military security net, but only to some extent. So, China thinks its imperative to protect its oil supplies and shipping routes, and is therefore investing immensely in its navy.

    I think economic and trade success is a security blanket in itself. Much of the US’s interests in protecting Japan, Taiwan and South Korea, notwithstanding the original motivations, now stems from keeping the economic symbiosis healthy. So, the more India can become a critically important supplier of goods/services, the more secure it will be.

  5. exerts influence through the threat or use of military force.

    Correct me if I am wrong, but in China’s case would this not be a bad move, considering the huge trade deficit with the US ?

  6. Japan, Switzerland, Taiwan, South Korea are all good examples where this isn’t true.

    I think Sriram comment #1 about military force is something that I agree on. For the above statement, I think it is important to note that South Korea is preety much a client state of the US. Japan to lesser degree. Let me give you a good example. When in the beginning of the 1990′s Irwin Jacobs (QUALCOMM) had CDMA technology (he got it from the US military tech), he went to all US and European carriers. Everyone turned them down. So finally using his military connections, Jacobs (in turn the US military) convinced South Korean SK Telecom to try this technology out. QUALCOMM is eating “malai” (royalty) from that ever since. This is the advantage of having a client state. (S. Arabia also fits the above actually).

  7. Correct me if I am wrong, but in China’s case would this not be a bad move, considering the huge trade deficit with the US ?

    Just to clarify, it’s the U.S. that has the massive deficit. And yes, drawing the ire of the U.S. to the point where it would impose sanctions would be detrimental to the Chinese economy. Still, that does not mean that a strong military won’t empower China to exert huge amounts of regional influence in Asia, Africa, or South America, where it is doing so in order to secure a dependable oil supply.

  8. The big question for the next 25 years is whether India can achieve economic prosperity without militarism. India recently built its first military base on foreign soil in Tajikistan (link). The USA has over 700 overseas bases. A good resource on how “garrisoning the planet” is just another name for empire is Chalmers Johnson (link). India is far and away the dominant power in South Asia (excepting the USA), and while Pakistan may have nukes and a large army, its economy and influence can’t compete with India at the moment (barring a catastrophe). So will India be able to resist the seductions of the military industrial complex, basing a chunk of its economy on defense spending, deploying its soldiers to other countries as a hedge against the regional influence Pakistan and China, and engaging in a full-bore arms race / cold war with Islamabad? No one knows.

  9. Just to clarify, it’s the U.S. that has the massive deficit.

    I figured that everyone knew that part.

    But tell me this guys, how is the relationship between China and Hugo Chavez?

  10. So will India be able to resist the seductions of the military industrial complex,

    Folks in India are free to correct me if I’m wrong, but it seems to me that she is gunning to become a global power, and not just a regional one. Offhand, I can’t think of any global super powers that have resisted the seductions of the military industrial complex. It’s simply the quickest and most effective way of exerting influence. Look at Pakistan and North Korea for example. The second they developed nuclear weapons, they had to be taken seriously on the global stage. From a pure economic standpoint, they have very little power. It’s all about getting invited to the cool kids’ table, and a nuke is the quikest way to do that.

    I don’t know much about the Chavez/China relationship, but I do know that the Chinese are doing a large percentage of the oil development in Venezuala.

  11. I believe China is still in a better position, even in the medium to long term, simply because it’s collectivist social policies do not prevent it from building a very strong military.

    Is the implication that non-collectivist social policies would prevent India from building a strong military? How did the U.S. get its strong military despite the fact it hasn’t largely relied on collectivist social policies? Also, it may be the case that growth in Chinese military power will provide a good incentive for India to build its own military out of self-interest.

    However, I think the key point that M. Friedman is making that the collectivist social policies of China, being incompatible with social liberty, will ultimately create a conflict that the Chinese government must address. Will the Chinese people, having enjoyed economic freedom, begin to demand more and more political and social freedom? If so, how will the Chinese government address the problem without widespread unrest or violence?

  12. Is the implication that non-collectivist social policies would prevent India from building a strong military?

    Not at all. I’m just saying that China is at an advantage because it has strong military.

  13. Good examples, but keep in mind that Japan, Taiwan, and South Korea all rely on being under the U.S. nuclear umbrella while Switzerland relied on NATO for military strength during the cold war.

    But wouldn’t Chinese attempts to exert military force on India fall under this situation as well? If China is ever bold enough to try and threaten India again it will be declaring itself as a new global military power, something the US has every incentive to stop.

  14. But wouldn’t Chinese attempts to exert military force on India fall under this situation as well? If China is ever bold enough to try and threaten India again it will be declaring itself as a new global military power, something the US has every incentive to stop.

    Of course, the US has a huge incentive in this scenario. But any country with a strong military has much stronger position at the bargaining table than a country with simply a strong economy. For example, in the global scheme, Japan and China both have very strong economic positions, but China is still given more deference in the international community. My argument is simply that this deference is granted to them because of their military power, and not just because they have a strong economy.

  15. The ever-excellent Tunku Varadarajanis far from ever excellent … he consistently argues from precarious positions that are the oddly extended, necessary half-logics of the conservative desi. Check out thos Princeton editors to see the inheritors of his mantle … I’m not saying he doesnt author occassionally interesting articles — but ever-excellent he certainly is not … more articulate Dinesh D’Souza embarassment he ever is.

  16. However, I think the key point that M. Friedman is making that the collectivist social policies of China, being incompatible with social liberty, will ultimately create a conflict that the Chinese government must address. Will the Chinese people, having enjoyed economic freedom, begin to demand more and more political and social freedom? If so, how will the Chinese government address the problem without widespread unrest or violence?

    It already has started. There was an excellent mutli-part series on PBS about China, it’s development, and conflicts.

    Chinese population of today, with the economic benefits, it turning into a society with more diversity (economic), thereby creating more social classes. When competing social classes don’t have an avenue to argue those frustrations out (a democratic setup), groups feeling the disadvantage will find other ways.

    China’s military has been it’s protection for years. Hell, they beat back UN forces in Korea once communists were routed to the border. Back then, it was sheer attrition and manpower. The US military was built around attrition and manpower, too, hence the UN/China/NK eventually compromised. Since then, the US (particularly after Vietnam) changed from an attrition warfare doctrine to maneuver warfare (Soviets were attrition all the way).

    India, just like China and the Soviets, is heavily reliant upon attrition warfare doctrine. It has the manpower to back it up. The navy is expanding. But those who see ‘militarization’ as a negative thing, I’d like to offer up another opinion. Militaration with a Democratic/representative republic setup has more pros than cons. The world isn’t going to get all peaceful anytime soon and those who are power hungry will exert their influence one way or the other. Democratic setups have internal check/balances that, while frustrating at times (read: slow), in the long run addresses problems far better, even with a military backing it up.

    Economic and military expansion are natural partners to a degree. Diverse economies democratic economies NEED a strong, professional, and volunteer military as a security blanket. Just the nature of what the ground realities are.

  17. The ever-excellent Tunku Varadarajanis far from ever excellent …

    A stream of insults doth not a well-reasoned argument make. Please cite something if you’re gonna diss so harshly.

  18. So will India be able to resist the seductions of the military industrial complex

    The debt which the world owes to our motherland is immense. Civilizations have arisen in other parts of the world. In ancient and modern times, wonderful ideas have been carried forward from one race to an other…. But mark you, my friends, it has been always with the blast of war trumpets and with the march of embattled cohorts. Each idea had to be soaked,in a deluge of blood…. Each word of power had to be followed by the groans of millions, by the wails of orphans, by the tears, of widows. This, in the main, other nations have taught, but India for thousands of years peacefully existed. Here activity prevailed when even Greece did not exist….Even earlier, when history has no record, and tradition dares not peer into the gloom of that intense past, even from then until now, ideas after ideas have marched out from her, but every word has been spoken with a blessing behind it and peace before it. We, of all nations in the world, have never been a conquering race, and that blessing is on our head, and therefore we live….

    Political greatness or military power is never the mission of our race; it never was and, mark my words, it never will be. But there has been the other mission given to us, which is to conserve, to preserve, to accumulate as it were into a dynamo, all the spiritual energy of the race, and that concentrated energy is to pour forth in a deluge on the world whenever circumstances are propitious. Let the Persian or the Greek, the Roman, the Arab, or the Englishman march his battalions, conquer the world, and link the different nations together, and the philosophy and spirituality of India is ever ready to flow along the new-made channels into the veins of the nations of the world. The Hindu’s calm brain must pour out its own quota to give to the sum total of human progress. India’s gift to world is the light spiritual (Lectures from Colombo to Almora, 3-7.)

    • Swami Vivekananda [Link]

  19. Just to clarify, it’s the U.S. that has the massive deficit. And yes, drawing the ire of the U.S. to the point where it would impose sanctions would be detrimental to the Chinese economy.

    The US is deeply in debt to China (China is the second largest holder of US treasury bonds, next only to Japan, which is beholden to the US in other ways). China does this partly to prop up the dollar (making its exports cheaper and the balance of trade favorable). So, the US will never dare sanctions either. Both parties very much depend on each other.